Earnings have returned, unemployment is falling, and capital markets are flowing. So, why are small business owners still struggling?
Reports From The Field
I recently took a trip to Chicago and met with nearly a dozen small business owners over the course of three days. (Whew!) The businesses varied by size and industry, but there were some clear themes that were confirmed, and they likely won’t come as a surprise.
First, revenue has returned, in some cases, more strongly than anticipated. Second, earnings would be even better if not for the supply chain disruptions. What’s fascinating is that this applies to manufacturing firms and professional services alike. Whether it’s challenging inventory management, distribution woes, or labor shortages, small businesses are experiencing a pretty bumpy economic recovery. (And there’s no guarantee we’re out of the COVID woods yet.)
Third, small business owners have no time, period. (They’re so short of time that they’ve probably stopped skimming this blog post already!) But here’s where there’s opportunity. Owners should be smart with their most valuable resource: their time. Where is it best applied, and where is it wasted. Things that should be delegated offer opportunities to grow that most valuable resource.
Time To Reallocate Your Time
Consider the owner who is developing business as well as running daily operations. Let’s say this owner’s top skill is finding opportunities and generating new revenue. By assessing where she is more valuable, she has created an opportunity to delegate to a subject matter expert by hiring, say a COO.
That may be easier said than done, as delegating means not only finding the right person for the job but also getting out of his way! He may do it differently, but the responsibility for the result lies on his shoulders now. Owners often struggle with this, and this recent article from Vistage explores this idea further.
How To Get Started
One way to assess areas of improvement is to assess the business, find out what it’s worth, and how the key performance indicators stack up to its peers. We offer such an evaluation to our clients, and it provides a powerful foundation from which to pursue 2 important paths:
- The business plan – Address weakness, expand upon strengths, align with on overall strategy for growth, and execute. This includes the ideal role the owner should play, and which responsibilities she should delegate.
- The personal plan – Assess the personal finances the owner is achieving from the business, align with the owner’s vision for the future, develop the financial plan, and execute. This also includes the delegation of responsibilities such as tax strategy, investment management, and financial planning.
Despite the crazy world which never ceases to surprise us, small business owners should make the time to assess their time. Reallocating and delegating could unleash growth for the business as well as the owner’s personal finances. Think you don’t have time? It’s an investment that could pay dividends for decades to come.